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Cost accounting

BAR Chapter 3 · Area I · Blueprint I.A.3

Every price, budget and variance rests on knowing what a product costs. The Blueprint asks you to split costs into fixed, variable and mixed, and to use absorption, variable, activity-based, process and job order costing. Ridgeline Bikes, which builds custom bikes to order and paints standard frames on a production line, gives us a reason to use every method.

In this chapter

1. How costs behave
2. Product costs and the cost of goods manufactured
3. Job order costing
4. Process costing and equivalent units
5. Joint products and by-products
6. Activity-based costing
7. Absorption costing and variable costing
8. Service departments and choosing a method

This chapter has 8 lessons, 50 practice MCQs with explanations and 15 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Fixed, variable and mixed costs
• absorption, variable, activity-based, process and job order costing

Chapter 2: Non-financial and non-GAAP measures · Chapter 4: Variance analysis and sales analysis